January 9, 2019

Lessons From the Private Sector: Takeaways From Recent ERISA Plan Fiduciary and Fee Litigation

By Jeff Chang

This is a blog about “public” benefits issues — one that focuses heavily, but not exclusively, on California developments. If we are focusing on California’s public agency retirement and welfare plans — which are generally exempt from ERISA — why worry about ERISA litigation? We worry, or at least consider ERISA litigation, because the standards of care established for public retirement plan fiduciaries were clearly patterned after those set forth in ERISA. The ballot arguments for Proposition 21, amending the California Constitution and adopted by voters in 1984, state, among other things:

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November 15, 2018

Recognizing That All “Rates of Return” Are Not the Same

By Jeff Chang

As a “baby-boomer” and one of the millions of my generation getting ready for retirement, I’ve naturally begun to focus more on the ups and downs of the stock market and all of the “advice” regarding how and when the current bull market will correct itself. Admittedly, I am not an investment advisor and this blog is not about handing out specific investment advice. However, I do feel qualified to share a few basic observations about investing practices and behavior that may be of interest and use to participants managing their own retirement investments or plan fiduciaries responsible for ultimate pension or OPEB obligations.

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October 19, 2018

If You Don’t Have a Section 218 Agreement, Watch Out for the Social Security “Gotcha”

By Jeff Chang

A section 218 agreement is an agreement between a state (or its local governments and instrumentalities) and the Social Security Administration providing for participation in Social Security and/or Medicare for designated groups of employees. Participation in a state’s section 218 agreement generally is not required. However, once a state, local government or instrumentality signs on to the section 218 agreement, that commitment becomes irrevocable.

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October 1, 2018

“Encouraging” the Repayment of Student Loan Debt

By Jeff Chang

Many of the public agencies we work with have expressed a strong interest in programs and arrangements that will help or encourage their employees to pay off their student loan debts. These programs can be important recruiting, retention and collective bargaining tools for employers. Frankly, under existing tax law, there are few — if any — ways for an employer to “help” its employees with the repayment of student debt incurred prior to employment on a nontaxable basis. This is because practically all “employer-made” payments for or on behalf of an employee will be considered taxable, unless a specific statutory exclusion from income is available. As a result, if an employer helps an employee repay his or her student loan by directly or indirectly paying the lender, this will generally be considered additional taxable income to the employee.  Continue reading →

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August 30, 2018

Why You Need to “Monitor” Full-time, Temporary Employees

By Jeff Chang

Due to budget restrictions and general hiring freezes, many California public agencies are forced to fill workforce gaps with temporary employees from staffing agencies. This practice, while quite common, is not well-understood — particularly when it comes to eligibility for CalPERS.

Misconception No. 1: Workers obtained from “temp” or staffing agencies are always the responsibility of those agencies Continue reading →

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